Friday, August 8, 2014

Ukraine situation ( August 8 , 2014 ) -- Latest updates from restive South East Ukraine , Russia counter moves to EU / US sanctions , Kiev in uproar as Maidan is back in the news again !

Vineyard of the Saker...


The wave pain for the EU is now slowly turning into a tsunami of mutually reinforcing problems

This is great stuff!  RT reports:
Ukraine ready to impose sanctions against any transit via its territory, including air flights and gas supplies to Europe, Prime Minister Arseniy Yatsenyuk said Friday.  Ukraine's Parliament will vote on the sanctions on Tuesday.  Kiev has also prepared a list of 172 Russian citizens and 65 legal enitites to put under sanctions for “sponsoring terrorism, supporting the annexation of Crimea, and violating the territorial integrity of Ukraine,” Yatsenyuk said at a briefing on Friday.  Proposed sanctions include asset freezes, bans on certain enterprises, bans on privatizing state property, refusing to issue licenses, and a complete or partial ban on transit- both aviation and gas.
Let me see if I got this right: the US/EU impose sanctions on Russia because Russia does not stop the Novorussian Resistance.  In retaliation, Russia imposes sanctions on the EU and a ban on Ukie overflights over Russia.  And in response to that, the Ukies prevent gas which the EU badly needs and which it paid for from reaching the EU.  Who will get hurt by that?  The EU, of course.  So, in fact, these idiots in Kiev, no doubt under US orders again, are now strengthening the Russian sanctions against the EU!  We can think of it as "Russia cutting off gas supplies to the EU in a way for which it cannot be blamed".

Beautiful, no?

The wave pain for the EU is now slowly turning into a tsunami of mutually reinforcing problems.

Well, they sure deserve it.  As I said yesterday: you wanna be Uncle Sam's bitch?  Pay the price!

The Saker

German Handelsblatt Releases Stunning Anti-West Op-Ed, Asks If "West Rabble-Rousers Are On The Payroll Of The KGB"

Up until this point Angela Merkel, and German media in general, had been staunchly on the side of the west when it comes to dealing with Russia, Putin and realpolitik in broader terms. That changed dramatically today when Gabor Steingart, the chief editor of Handelsblatt, Germany's leading economic newspaper, came out with a stunning op-ed, in GermanEnglish and Russian, titled simply that "The West on the wrong path" in which the editor comes out very vocally against the autopilot mode German media has been on for the past several months and calls for an end to a strategy of sanctions and Russian confrontation that ultimately "harms German interests" and is a dead end.

Futures Soar Back To Green, Dax Over 9000 On RIA Headline "Russia Seeking TO De-escalate Conflict"

Tyler Durden's picture

Wonder why moments ago futures soared and wiped out all overnight losses of nearly 15 points, pushing into the green, the DAX surging back over 9000 and the USDJPY right back to its cozy tractor-beam manipulated level of 102.000, just as the NY Fed's Kevin Henry walked through the door? The culprit: the following lone headline blasted by Bloomberg moments ago:
Supposedly RIA is citing the secretary of the Russian Security Council, and while we have yet to find any more context on this sole headline, it was enough for the algos to assume that, just like yesterday when a same story was floated only to be roundly rejected in hours, all is again fixed. Needless to say, believing that Putin will back off at this point is a pipe dream only a momentum-igniting vacuum tube can harbor.
Of course, by the time Russia rejects any hopes of de-escalation, the catalyst for the ramp will be forgotten and stocks will close green ahead of the weekend, just as the Princeton central-planners demanded. And making sure Russia has zero intentions of de-escalating, is the latest counter-escalation by Ukraine itself:
One can just see Putin "backing off" after being verbally and sanctionally slapped by Ukraine...

Moon of Alabama.....

Ukraine: One Nazi Resigns - Russia Sanctions Start To Blow Back

The most aggressive man in the Ukrainian government, the Secretary of the National Security and Defense Council Andrey Parubiy resigned today:
The media stated that Parubiy decided to resign after he was ordered [by President Petro Poroshenko] to declare another ceasefire in Kiev’s military operation in the southeast of the country, but he refused to do so.
Parubiy was co-founder of the far-right Social-National Party of Ukraine and was creator and commander of the Einsatzgrupppen like volunteer National Guard forces which are currently suppressing the people in the east.

It seems that the indiscriminate shelling of major cities in the east under Parubiy's command had finally had enough negative publicity effects. The UN is alarmed about the refugee streams and the humanitarian situation and even Amnesty International is now accusing Parubiy's Einsatzgruppen of abductions and ill-treatment of the eastern population. Poroshenko needs to stop the war before public support for him  completely disappears.

An attempt today by the new rulers to clear away the Maidan protesters who helped them into power ended, like before, in outright street fights. These protesters are still waiting for any change. Corruption in Ukraine is as big as ever. Only the oligarchs who end up with the peoples money have changed.

NATO chief Rasmussen, who is currently in Kiev, will be disappointed if Kiev decides to stop the war. He is dearly hoping for Russia to militarily intervene in Ukraine which would then justify further NATO aggressions. If Kiev keeps shelling the local population Russia will need to send peacekeepers to stop the killing. If the shelling stops there is no reason for Russia to step in.

The outright stupid sanctions the EU put on Russia are creating the well deserved blowback. The Russian president Putin's approval rating soared to 87%. The counter sanctions Russia is implementing by rejecting food imports from the countries sanctioning it will be great for Russia's local producers. Some "western experts" believe that sanctions will over time push the Russian middle class against Putin. Anyone with a slight insight into Russia's social history will call this bullshit.

Under pressure Russia always unites and the national character is one that will rather do without any luxury at all before giving in to foreign pressure. Russia has enough land, people and resources to produce everything it needs. There is no way sanctions on Russia will have any of the allegedly desired effects.

August 06, 2014

U.S. Sanctions Erode Its Foreign Influence

A few days ago the Leveretts looked at the effects of U.S. financial sanctions and the other ways the U.S. pisses off major countries. They find that the current path of U.S. foreign policy will erode the U.S. dollar hegemony and lead to a destruction of the "extraordinary privilege" (de Gaulle) the U.S. has had with the ability to print the world's reserve currency. The political erosion of the dollar will be felt in the commodity markets and especially in energy deals which will then have further effects in foreign relations: Petrodollars, Petroyuan, and the Ongoing Erosion of American Hegemony
Looking ahead, use of renminbi to settle international hydrocarbon sales will surely increase, accelerating the decline of American influence in key energy-producing regions. It will also make it marginally harder for Washington to finance what China and other rising powers consider overly interventionist foreign policies—a prospect America’s political class has hardly begun to ponder.
Sadly, only few will listen to the Leveretts but now Bloomberg picked up the theme:Russia Sanctions Accelerate Risk to Dollar Dominance
While no one’s suggesting the dollar will lose its status as the main currency of business any time soon, its dominance is ebbing. The greenback’s share of global reserves has already shrunk to under 61 percent from more than 72 percent in 2001. The drumbeat has only gotten louder since the financial crisis in 2008, an event that began in the U.S. when subprime-mortgage loans soured, and the largest emerging-market nations including Russia have vowed to conduct more business in their currencies.“The crisis created a rethink of the dollar-denominated world that we live in,” said Joseph Quinlan, chief market strategist at Bank of America Corp.’s U.S. Trust, which oversees about $380 billion. “This nasty turn between Russia and the West related to sanctions, that can be an accelerator toward a more multicurrency world.”
Some five years ago we already looked at this decline of the U.S. dollar as reserve currency and its effects:
So far the U.S. could borrow cheaply and pay back less in real value than the original loan. That privilege is now going away. The trillions the U.S. currently needs to borrow from abroad will have to be payed back in full. That is a major change in its global power status and will seriously decrease its influence in international policy questions.
The European Union which stupidly followed the U.S. sanctions on Russia with its own is also hurting itself:
Financial interdependence offers a powerful opportunity for coercive diplomacy.But the unintended message Europe's leaders sent is that financial interdependence is a source of vulnerability that countries like Russia, but also China, Iran and others, would be wise to avoid.
Europe's financial sanctions against Russia likewise add incentives for countries to look for alternative arrangements that reduce financial interdependence.
Moreover, those incentives will only increase if the sanctions are successful. Even if Europe encourages the Russian government to change its policy toward Ukraine, the Russian government will respond over the longer term by seeking financial arrangements that leave it less exposed to such coercion.
It will take years until the dollar will lose its reserve status but the decline is already visible. More and more deals are now made bilateral between partners in their own currencies and get settled outside of the financial channels the U.S. tries to sanction, block, spy on or to criminalize.

The U.S. foreign policy reliance on sanctions, pressure and war is sawing off the high branch the U.S. is sitting on.

Anti War.....

Ukraine Escalates Attacks Against East, Ditches Ceasefire at Crash Site

Army Artillery Shells Dental School, Kills Civilian

by Jason Ditz, August 07, 2014
The Ukrainian military is continuing to escalate its attacks against the eastern portion of the country, announcing today that it is suspending the ceasefire at the area around the MH17 crash site.
Ukrainian forces had largely ignored the ceasefire at any rate, attacking several cities within the ceasefire zone in recent days. The announcement appears to portend even further escalation of the offensive against breakaway easterners.
The attacks continue to focus on the city of Donetsk, with intense artillery fire hammering a hospital in the city, hitting the pediatric dental wing and killing at least one civilian.
Rebel leader Aleksander Borondai announced he is stepping down as leader of the eastern rebels, becoming a deputy under new leader, Alexander Zakharchenko, a native of Donetsk. Borondai had been under criticism internationally as a “foreign fighter” because he was originally from Moscow, and says he hopes Zakharchenko will reflect the rebellion’s local nature.

Thursday, August 7

19:16 GMT:
Four civilians have been killed and 18 people wounded as a result of Thursday’s shelling of residential areas in the city of Donetsk, the region’s administration reported, citing health officials.
18:06 GMT:
Self-defense forces have shot down a Ukrainian military jet on the outskirts of the city of Yenakievo, northeast of Donetsk. The aircraft crashed and exploded between the villages of Rozovka and Zhdanovka, reports LifeNews. Journalists who were in the area said they heard the blast and then saw a plume of smoke. According to one reporter, the pilots managed to eject. The type of the plane is currently unknown, but sources told LifeNews it could be SU-25 or MiG-29.
16:27 GMT:
Aleksandr Boroday, the prime minister of the self-proclaimed People's Republic of Donetsk (DPR) has announced he will resign. He will be replaced by Aleksandr Zakharchenko, one of militia commanders and also a leader of the ‘Oplot’ movement.
I came here as a crisis manager, a start-upper, if you want. I’ve managed to achieve a lot in the past several months, the DPR has been established as a state,” Boroday told a media conference in Donetsk, as cited by RIA Novosti.
Unlike Boroday, who originally comes from Moscow, Zakharchenko was born in the Donetsk region. Boroday was appointed prime minister of the DPR on May 16. Boroday will reportedly continue his work at the DPR government as an adviser to the prime minister.
15:09 GMT:
Five civilians were killed and ten more injured in shelling in the city of Gorlovka in the Donetsk region, the city council website reported. The statement added that part of the city was left without power as an electrical substation was bombed in the Stroitely district. Water supplies were also cut-off in the city.
An Orthodox priest gestures with a stick and shouts as Maidan self-defence activists clash with fighters of Kiev-1 volunteer battalion on Independence Square in Kiev on August 7, 2014.(AFP Photo / Sergei Supinsky)
An Orthodox priest gestures with a stick and shouts as Maidan self-defence activists clash with fighters of Kiev-1 volunteer battalion on Independence Square in Kiev on August 7, 2014.(AFP Photo / Sergei Supinsky)

15:03 GMT:
Fighting continues on the outskirts of the town of Snezhnoye in the Donetsk region. Kiev forces are attempting to relieve a group of the military and National Guard troops, encircled by the militia near the border between Ukraine’s Donetsk region and Russia, the press service for the self-declared People’s Republic of Donetsk told RIA Novosti. So far, self-defense has reportedly managed to repel attacks.
14:34 GMT:
Activists and police have clashed in Kiev’s city center after city workers tried to dismantle the Maidan camp on Independence Square. Camp residents are currently fortifying the old barricades and building new ones. It’s not known how many people were injured. The majority of those wounded were from stones thrown by protesters.
“Police were carrying out public order maintenance and the work of communal services, but then the camp caught fire, and the fire brigades are now dealing with the blaze,” the Kiev police press service stated.
View image on Twitter
: Black smoke billows as tires burn on Kiev's Maidan Square